Why a CRM System Won’t Improve Your Customer Experience

20.09.2024

Many CRM software vendors highlight the benefits of implementing a CRM system on their websites with impressive statistics: claims like a “4.9% increase in sales through automation,” “12% boost in customer loyalty,” or a “10% increase in post-sale revenue through better service.” But can these figures really be trusted? This article explores the question, “Why doesn’t a CRM system improve your customer experience?” and clarifies the distinction between a CRM system and customer experience. 

In this post, you’ll discover what software technology is and how it differs from strategic business orientation. You’ll also learn how to critically assess such bold claims. Even if you think you understand CRM systems and customer experience, start by reading the last chapter and then work your way through the rest, because here’s the truth: many believe they know, but very few actually do. 

Let’s dive in: What is a Customer Relationship Management (CRM) system?

It’s helpful to ask new tools for a precise definition. ChatGPT answers the question, “What is a CRM system?” as follows: 
 
A Customer Relationship Management (CRM) system is a software solution that helps companies manage customer relationships effectively. It collects, organizes, and analyzes customer data to provide a comprehensive view of interactions. By using CRM systems, businesses can optimize marketing, sales, and customer service processes to offer personalized and efficient support. 
 
The term “software solution” is key here, as it highlights that a CRM system is built to facilitate customer-centric processes within your company. Now, let’s dispel a common misconception:

A CRM system is not just a sales software solution. 

Many businesses think a CRM system is solely meant for managing sales processes. This is as inaccurate as saying every software provider only offers one CRM system. Major providers like SAP, Microsoft, and Salesforce offer CRM solutions not only for sales, but also for marketing, service, and e-commerce. Each is an independent system, but can be easily integrated with the others. So, if you need CRM for both sales and marketing, you’re actually looking at two systems. 

What is customer experience (CX)?

So, how does ChatGPT define customer experience? When asked to explain it in three sentences, here’s the answer: 

Customer experience refers to the full range of interactions a customer has with a company, from initial contact to post-purchase and beyond. It includes all touchpoints, whether digital, physical, or through customer support. A positive customer experience aims to boost satisfaction, loyalty, and long-term relationships. 

In short, customer experience is a broad and complex field. It’s about meeting a customer’s expectations throughout their entire journey with your company. This complexity becomes apparent when you consider the many touchpoints customers might have – through social media, your website, emails, or even tangible experiences like unpacking a product or reading a user manual. Here are some examples of companies excelling at these customer experience touchpoints: 

  • Operating instructions: IKEA makes assembly simple for customers. 
  • Unboxing the product: WMF ensures the customer feels they’ve bought quality the moment they unbox. 
  • Chat: Amazon offers 24/7 chat support, providing personalized solutions. 

To manage this complexity and truly understand customer needs, the concept of Customer Experience Management (CXM) was born. This is essentially a strategy that companies use to align their business processes with customer expectations, which brings us to customer-centricity – a buzzword you’ve likely heard. CX can be broken down into four key areas: 

  1. Customer-centric business processes
    Customers expect their interactions with a company to be quick, easy, and barrier-free. They don’t care whether a process is complicated on the company’s end; they just want their issues resolved efficiently. Yet, many companies still prioritize internal process efficiency over customer satisfaction. A common example is the complaints process, where the interests of the company often clash with those of the customer. As Steve Jobs famously said, “You have to start with the customer experience and work your way back to the technology.”
  2. Employee engagement
    Embedding customer experience deeply into your corporate culture is crucial. Customers not only want their issues resolved but also want to feel understood on a human level. Empathetic, well-trained employees are key to achieving this. However, for employees to stay engaged, the company’s processes must also be customer-centric. If they aren’t, employees may become frustrated, unable to meet customer needs and bearing the brunt of customer dissatisfaction.
  3. Continuous company adaptation
    Conditions are always changing, as are customer expectations. Take sustainability, for example, which has become a hot topic in recent years. Companies must adapt to meet these evolving demands, whether it’s switching from plastic to paper packaging or launching large-scale sustainability initiatives. Similarly, customers now expect modern digital solutions like chat functions, online shops, and automated processes. The right applications can help your company meet these tech-driven expectations.
  4. Product/service expectations
    What is your company known for in the market? What should it be known for? If you manufacture high-quality coffee grinders, for instance, strict quality control must be embedded into your production. Customers expect nothing less. In contrast, low-budget providers can afford occasional quality issues, as customers accept these in exchange for lower prices. It’s essential to understand what your customers expect from you.

So, why doesn’t a CRM system improve your customer experience?

To answer this, consider the question: what does a carpenter’s hammer have to do with building a house? The answer is – nothing by itself! The hammer helps the carpenter build, but it doesn’t guarantee a good house. Similarly, a CRM system is a tool for your company, but it won’t create a great customer experience on its own. Even with the best CRM systems, your customers can be unhappy if, for instance, your shipping processes are poorly managed and orders arrive late. 

CRM systems are there to support your employees in their day-to-day work, but the overall customer experience could still be lacking. The real question is: why should most companies still invest in a CRM system? 

Here’s how to approach it: first, identify what your customers expect from your company. Examples include: 

  • Simple, hassle-free online shopping. 
  • Full, accurate service on every call, no matter which employee answers. 
  • A clear, structured offer within three days of a customer request. 
  • Multiple ways to get in touch with your company. 

The goal of customer experience is to meet – or even exceed – these expectations. The good news? There are already tools, like CRM systems, that can help you achieve this. So, why wait? Get started today! 

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